June 10, 2021
Are you a first-time homebuyer? There are some issues you should know about when you start your journey toward owning a home.
It is a very good idea to make a checklist before you start and add to it along the way. Start your process as organized as you possibly can-there are some important things to do before you ever fill out home loan paperwork and there are a lot of little details.
Organizing, checklists, and goal-setting are all important skills you’ll develop or continue to develop during this process.
Real Estate Agents: To Use Or Not To Use?
A real estate agent can be a big help for a first-time home buyer but you do NOT have to use one if you don’t want to.
This is a choice that could make a difference in time looking for just the right home. If you choose to use the services of a real estate agent, be sure to include a list of features you want in your home and features you do not want. Your agent will help you find the right property.
Learn To Negotiate
We get it; people hate the very idea of negotiating, and that is exactly why YOU should get comfortable with the idea. Why?
You’ll have an advantage when it comes time to discuss things like asking your seller to contribute up to six percent of the sale price of the home toward your closing costs–something FHA loans permit you to do if you and the seller can agree.
This negotiation is important because it can free up money you would otherwise spend on closing costs and you can use that money for your down payment.
Start Planning And Saving For Your Down Payment
FHA home loans require a down payment. Some confuse FHA loans with other programs; for example, the USDA mortgage loan program offers zero down mortgages but these loans are need-based.
The other zero-down option, VA mortgages, is intended for qualifying military borrowers and certain surviving spouses–these loans are not open to the public.
Your down payment funds must come from an approved source and not cash advances, payday loans, or other non-collaterlized lending.
Decide How Much Home You Want
FHA home loans allow you to buy a home with up to four living units. Even a first-time home buyer can purchase property that large with the same down payment percentage (3.5%) and basic credit score and income qualifications.
Additional lender standards will apply–be sure to ask.
In general, a multi-unit home is a great way to purchase real estate you can grow into and even rent out as long as you are still living there as your home address. FHA loans require occupancy as a condition of home loan approval.
Get Pre-Approved For An FHA Mortgage
Get in touch with an FHA lender to discuss getting pre-approval for your home loan when the time is right. Pre-approval tells your realtor and the seller that you are a serious buyer, and are not window shopping.
Above all, make sure you are checking your credit reports and monitoring them regularly for mistakes, evidence of fraud, or outdated information. You will be very glad you did!
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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